Friday, September 16, 2011

Quotes of the day

When you wallpaper over termites, at first it looks good for awhile.--Rick Santelli, on CNBC a few moments ago, on the European economy and the markets

... she continues screaming, "Oh God, we're going to die." So the people on the plane are looking around. "Nobody's saying we're not going to die; maybe we are going to die." And so finally we land and they come off, and she gets off and she's very shaken. And she was sitting next to this kid who was just staring out the window the whole time, like, oh God, please don't. And so I say to that kid, I said wow that was some flight, huh? And the kid said, "This was my first time on an airplane. Is it always like this?" And I realized after three years in DC, I was that kid.--Austan Goolsbee, on his time as President Obama's chief economist

SAGAL: One last question, before we go to the game. How does it feel to be one of the men that salon dot com named one of the 15 sexiest men of 2010?
Mr. GOOLSBEE: I said at the time I didn't even know Salon was printed in Braille.
SAGAL: Very good.
SAGAL: That may be the funniest thing a government economist has ever said on this show.

Spending money on such boondoggles to create jobs relies on a faith in the fiscal multiplier, and the magic of spending to reduce debt. Bush II spent like a drunken sailor (wars, medicare) and this ended with a disaster even though it should have been no worse than the alien invasion expenditures suggested by Keynesian economists. It should be remembered that after independence India focused on jobs and the poor, as opposed to free trade and property rights, and they stagnated for decades. If governments could boost the economy spending on big top-down projects, countries like India would have done much better than countries that were less hands-on in their management.--Eric Falkenstein

... as Larry Summers famously described it, Keynesian countercyclical policy is "temporary, targeted, and timely." The Reagan tax cut was certainly not temporary. And it wasn't targeted either; it was across the board. And it wasn't timely because it lasted well beyond the recession and the recovery. In fact, it is just the kind of "permanent, pervasive, and predictable" policy that we need now.--John Taylor

One obvious step would be a cut in the taxation of income from corporate capital. According to a 2008 study by the Organization for Economic Cooperation and Development, “Corporate taxes are found to be most harmful for growth.” Tax reform that reduced the burden on capital income and shifted it toward consumption would improve prospects for long-run growth and, in so doing, encourage greater investment today. Yet it would be overly optimistic to think that any single public policy, by itself, could lead to the kind of robust investment spending seen in previous recoveries. Myriad government actions influence the expected future profitability of capital. These include not only policies concerning taxation but also those concerning trade and regulation. For example, passing the free trade agreement with South Korea, which has languished in Congress more than four years after first being negotiated, would be a step in the right direction. So would reining in the National Labor Relations Board; its decision to block Boeing from opening a nonunion plant in South Carolina may have been hailed by organized labor, but it surely did not hearten investors. Economists often rely on the convenient shortcut of separating long-run and short-run issues. Recessions are then viewed as short-run problems that require short-run solutions. That approach, however, may be simplistic. Lack of investment spending is a large part of the economy’s current difficulties, but capital investments are always made with an eye toward the future. The best fix for our short-run problems may be to focus on policies that will foster long-run growth as well.--Greg Mankiw

As I sat in my first Harvard economics lecture, listening to Greg Mankiw introduce himself to his new graduate class, my head was in a spin. Could he really be a Republican Keynesian? And a Keynesian disciple of Milton Friedman? For a young Brit, just graduated from Oxford, this was revolutionary; what I thought was the conventional economic wisdom was being turned upside down. ... Keynes himself must be turning in his grave. For – as that Greg Mankiw class highlighted to me, and has now been fully documented in Lord Skidelsky's biography – the real Keynes was no profligate tax-and-spender. His seminal 1930 Treatise on Money was as hawkish on inflation as Friedman decades later. His attitude to irresponsible wage bargaining in the 1920s was as unforgiving as Thatcher in the 1980s.--Ed Balls, Great Britain's shadow chancellor

If you have a luxury sports car, you don't put 87 in it. You put in 93. So why would I put 87 into my body? I want my body to run as efficiently as possible, so let me put good stuff in it and go out here and exercise. That's the key, and it's been working.--Damien Woody

I'm so proud of [Tom Brady] and what he’s done -- and the way that he’s done it. He's not only been one of the very best players in the league now for a long time, but he’s continued to handle himself with class, on and off the field. I’m really just proud of what he’s done and the way he’s led this team.--Drew Bledsoe

It's possible to overthink things. But thinking is what makes life interesting. It's why pure talent isn't necessarily as entertaining as doing more with less. ... We live in a celebrity culture, and that collective ideology drives sport as much as anything else. When we turn on the TV, we want to see famous people. Yet every athletic superstar is just another stand-in (both for the player who came before him and the player who'll come after). Life is a game, and we are the pawns. The only thing that matters is how the pieces move.--Chuck Klosterman

Physical courage is admirable, but in modern society it simply isn't as important as it was when philosophy developed 2500 years ago. Intellectual courage, the readiness to risk humiliation, is much harder, precisely because it is more ambiguous. Only with the virtue of hindsight of generations do we see intellectually courageous stands for what they were, what distinguishes the Churchills from the Maos, the Galileos from the Lysenkos. It is courage combined with prudence, not mere zealotry. Having something terrible happen to you generates instant sympathy. Our culture has moved from from celebrating accomplishment (Eisenhower) to suffering (McCain), where suffering has been expanded to include the indignity of growing up a non-asian minority. Thus, Obama's rather cushy Hawaiian life was transformed in his autobiography into something subtly oppressive because his biological father was African.--Eric Falkenstein

Readers of history may call to mind the Roman Empire, the Russian years under Communism, certain local churches, Christian universities, confessional seminaries, and on and on. They know that human institutions can never be so safely constructed that outcomes are guaranteed. For the heart of the human dilemma is so deeply rooted in personal sin that no structure can finally reform it. The lament for Israel’s princes becomes a lament for the human race, which desperately needs a solution far deeper and more effective than princes, presidents, and structures can ever provide.--Don Carson